enior employees of publicly traded corporations are often awarded options to buy stock in the company. Options are set a price to be paid for the stock by the employee by a certain date, for a specified number of stock shares. If the strike date arrives and the stock of the corporation is selling for an amount higher than the option price, the employee will exercise the option and his profit will be the price at which the stock is trading less the option price. The option is said to be in the money.
If the strike date arrives and the stock of the corporation is selling for an amount the same as the strike price, the option holder might exercise his option and take the stock. The option is said to be at the money.
If the strike date arrives and the stock of the corporation is selling for an amount less than the strike price, the option will be left to expire. The option is said to be out of the money.
If the strike date arrives and the stock of the corporation is selling for an amount the same as the strike price, the option holder might exercise his option and take the stock. The option is said to be at the money.
If the strike date arrives and the stock of the corporation is selling for an amount less than the strike price, the option will be left to expire. The option is said to be out of the money.
Stock Options in Divorce
In Illinois, by statute, stock options vested or otherwise are considered to be marital property if they are acquired during the marriage.
Attention must also be paid to the possibility that the stock option is awarded for past and future work performance. Often times, as the dissolution case moves to an end, the option holder will be holding options that have a strike date after the dissolution, the argument will be advanced that the options should be divided because they were granted during the marriage. An argument can be made that a stock option for future, as well as past work by the employee should not be divided as marital property because it forecasts work that will be done after the divorce litigation is concluded.
Given the statutory provision for stock options, they are factoring more and more into settlement talks. There worth needs to be determined, and your attorney might ask your approval to hire a valuation expert. Make certain that these expert’s bills go to you as well as to your attorney. It never hurts to monitor the work of retained experts. They are generally quite proficient and will not mind a client’s overview.
Attention must also be paid to the possibility that the stock option is awarded for past and future work performance. Often times, as the dissolution case moves to an end, the option holder will be holding options that have a strike date after the dissolution, the argument will be advanced that the options should be divided because they were granted during the marriage. An argument can be made that a stock option for future, as well as past work by the employee should not be divided as marital property because it forecasts work that will be done after the divorce litigation is concluded.
Given the statutory provision for stock options, they are factoring more and more into settlement talks. There worth needs to be determined, and your attorney might ask your approval to hire a valuation expert. Make certain that these expert’s bills go to you as well as to your attorney. It never hurts to monitor the work of retained experts. They are generally quite proficient and will not mind a client’s overview.
